ANAHEIM : Arena Poses Little Risk, Officials Say

On the eve of a marketing campaign to lure luxury box patrons to the Anaheim arena, city officials Monday defended the building of the facility as a soundly conceived project that will bring millions to the city and expose it to only minimal financial risk.

City Manager James Ruth and Finance Director George P. Ferrone told reporters they firmly believe that two professional sports franchises will be signed to the arena by the time it opens in 1993, an arrangement that guarantees Anaheim 25% of the facility’s net profits each year.

Even without a single team, the city is responsible for only $2.5 million per year of any revenue shortfall, Ferrone said. Ogden Facility Management Corp. of Anaheim, which will manage the arena, will shoulder the liability for any remaining shortfall, Ferrone said.

Officials have declined to say which teams they are attempting to lure to Anaheim.

As Ogden prepares to begin marketing luxury suites next month, Ruth emphasized the security and wisdom of the city’s investment in the $103-million project, saying the benefits far outweigh the potential risks.

The project is backed with a $100-million letter of credit posted by Ogden and the Nederlander Organization.

Ron Bates, a consultant to the project, said the city anticipates $30 million in profits from the facility over a 30-year period. The arena will generate another $89 million per year in Orange County from the multiplying “spinover” effect of all arena-related dollars that are spent, Bates said.

The arena will also create 250 jobs during its construction and 30 full-time and 1,000 part-time jobs when it is completed, the officials said.

Concrete was poured for the new arena last week. Ogden will begin selling luxury suites next month from an office at 2605 E. Katella Ave. in Anaheim.